Unit 3: Area of Study 2 - Managing Employees Flashcards
Business Objective
Is a goal that a business sets out to achieve in a given time period
The Relationship Between Managing Employees and Achieving Business Objectives
For the best results, it is important that the Employees are performing to their potential. This can be achieved by ensuring they are engaged and motivated.
Ways Businesses can Help Employees Achieve Business Objectives (List 2)
- Align the Employees with the Business Objectives
- Ensure the Employees are motivated
- Ensure the Employees receive training when needed
- Measure and manage the Employees’ performance
Human Resource Management
Is the effective management of the formal relationship between the Employer and Employees
Maslow’s Hierarchy of Needs
Suggests that Employees have 5 levels of needs which can be rearranged according to their importance in a Hierarchy. The lower levels must be met before an individual can move to the needs that are higher in the Hierarchy
Levels of Maslow’s Hierarchy of Needs (From Bottom to Top)
- Physiological Needs
- Safety and Security Needs
- Love and Belonging Needs
- Self-Esteem Needs
- Self-Actualisation Needs
Maslow’s Hierarchy of Needs: Physiological Needs
Is where the Employees are motivated by fair pay and working conditions
Maslow’s Hierarchy of Needs: Safety and Security Needs
Is where the Employees are motivated by knowing they have job security and a safe workplace
Maslow’s Hierarchy of Needs: Love and Belonging Needs
Is where the Employees are motivated to build strong relationships within the business
Maslow’s Hierarchy of Needs: Self-Esteem Needs
Is where the Employees are motivated to build a large amount of self-esteem within themselves. Recognition and responsibility can help achieve this
Maslow’s Hierarchy of Needs: Self-Actualisation Needs
Is where the Employees are motivated by aiming to achieve their full potential
Advantages of Maslow’s Hierarchy of Needs (List 2)
- It recognises that every Employee’s needs are different and can use strategies to satisfy those needs and improve motivation
- The theory is easy to understand and apply at a basic level
- It is relevant in all fields of employment
Disadvantages of Maslow’s Hierarchy of Needs (List 2)
- Based on the theory, we assume that if an individual lacks the basic amenities or are in an unsafe working environment, they will never unlock the higher needs in the Hierarchy
- It cannot be applied uniformly because each Employee is at a different level on the Hierarchy
- It is time-consuming because the Human Resource Manager needs to consult each Employee
- It Fails to consider cultural differences because people in certain cultures place the importance of needs in a different order
Locke and Latham’s Goal-Setting Theory
Suggests that Employees are motivated by clear and challenging goals in addition to feedback about their achievement
Attributes of Locke and Latham’s Goal-Setting Theory
- Clarity
- Challenge
- Commitment
- Feedback
- Task Complexity
Locke and Latham’s Goal-Setting Theory: Clarity
The goals need to be clear, specific and clearly understood. The goals also need to be measurable and developed within a clear timeframe, with an end date for when the goals need to be completed by
Example of a Clear Goal in Relation to Locke and Latham’s Goal-Setting Theory
To increase sales by 8% by the next quarter
Locke and Latham’s Goal-Setting Theory: Challenge
Suggests how the goal should be challenging but still achievable by the Employee and should be relevant in being able to achieve Business Objectives. The theory shows how there is a direct correlation between how challenging a goal is and how much motivation an Employee has
Locke and Latham’s Goal-Setting Theory: Commitment
The more committed an Employee is and the more say they have in the goal, the more motivated they will be to work towards the goal and the more committed they will be in achieving that goal
Locke and Latham’s Goal-Setting Theory: Feedback
Shows how regular constructive feedback helps keep the Employee on track to achieving the goal. Feedback can either be formal or informal
Formal Feedback
Is feedback where the Employer organises a meeting to provide the Employee with feedback
Informal Feedback
Is feedback where an Employer meets with the Employee at lunch or during their break to provide them with feedback
Locke and Latham’s Goal-Setting Theory: Task Complexity
Refers to how the goal should be challenging enough to motivate the Employee, but not too challenging that the Employee is overwhelmed. Deadlines for the goals have to be set
Advantages of Locke and Latham’s Goal Setting Theory (List 2)
- It is a clear way of measuring an Employee’s performance against Business Objectives
- It allows for Employee Feedback and may improve the relationship between the Manager and Employee
- Setting goals that are clear and specific,
challenging but not overwhelming, will motivate
Employees and improve their performance, thereby contributing to Business Objectives - Staff will perform at a higher standard due to their clear and specific goals, leading to a higher rate of productivity
- Better relationships between management and
Employees will occur as Managers work with each Employee to collaboratively set goals and provide feedback
Disadvantages of Locke and Latham’s Goal-Setting Theory (List 2)
- Time-consuming goals may result in Employees having a hard time remaining motivated and the tasks will eventually seem unimportant
- Employees that lack skills to perform actions for achieving goals may lead to goal-setting failure
- Failing to meet a goal could be detrimental to an Employee’s confidence
- Employees may focus so intently on their goals
that they ignore other aspects of their job
Similarities Between Maslow’s Hierarchy of Needs and Locke and Latham’s Goal-Setting Theory (List 2)
- Both theories highlight the importance of achieving job satisfaction as a key motivator
- Both theories focus on achieving one thing at a time; Locke and Latham it is one goal at a time and Maslow is one step in the Hierarchy at a time
- The successful achievement of a goal in Locke and
Latham’s Goal- Setting Theory is similar to meeting the Self-Esteem and Self-Actualisation needs in Maslow’s
Theory
Differences Between Maslow’s Hierarchy of Needs and Locke and Latham’s Goal-Setting Theory (List 2)
- Maslow’s Theory has to be achieved in order whilst the Goal-Setting Theory does not
- Maslow’s Theory is ongoing and long-term whilst the Goal-Setting Theory is more short-term because when a goal is achieved, the process ends
- Individual Employees can be very significant in the goal-setting process, while Managers are
more significant in setting a tone that allows for
the satisfaction of the different levels in Maslow’s
Hierarchy of Needs
Lawrence and Nohria’s Four Drive Theory
Suggests that all people have 4 major Drives that need to be satisfied in order to be motivated
The Four Drives in Lawrence and Nohria’s Theory
- Acquire
- Bond
- Learn
- Defend
Lawrence and Nohria’s Four Drive Theory: Acquire
Relates to how an individual is driven to gather Tangible items such as clothing and also status and power
Lawrence and Nohria’s Four Drive Theory: Bond
Relate to how an individual wants to feel as though they ‘belong’ in the business and is driven to seek strong relationships within the workplace
Lawrence and Nohria’s Four Drive Theory: Learn
Relates to Employees have a drive to satisfy their curiosity and to develop understandings of their environment, which is done by the drive which pushes the Employees to collect information and to understand how things work
Lawrence and Nohria’s Four Drive Theory: Defend
Relates to how Employees have a desire to remove threats to their safety and to protect those who are closest to them. The aim of a business is to create a work environment where the Employee doesn’t need to defend themselves
Advantages of Lawrence and Nohria’s Four Drive Theory (List 2)
- The Theory is very adaptable to complicated environments and situations
- When all Drives are being applied by Managers for Employees, the motivation levels are high and Business Objectives will be achieved
- The Four Drives will convert into effort that is
directed at improving behaviour, thereby improving business performance and achieving Business Objectives
Disadvantages of Lawrence and Nohria’s Four Drive Theory (List 1)
- Individual Employees have a unique Four Drive motivational profile
- Since all Employees are different, one strategy of the Theory cannot motivate all Employees
- Other drives besides the four outlined by Lawrence
and Nohria may exist
Similarities Between Maslow’s Hierarchy of Needs and Lawrence and Nohria’s Four Drive Theory (List 1)
The rewards that come from the achievement of a goal in Locke and Latham’s theory can be linked to Lawrence and Nohria’s Drive to Acquire
- In both Theories it is important that the Manager understands the needs of their Employees
- Both Theories are primarily focused on employees
- In Locke and Latham’s Theory, Employees have a significant role in setting goals and in Lawrence and Nohria’s theory, what drives the Employees is at the centre of achieving required levels of motivation
Differences Between Maslow’s Hierarchy of Needs and Lawrence and Nohria’s Four Drive Theory (List 1)
- In Locke and Latham’s Theory, a person is usually pursuing one specific goal at any given time, while Lawrence and Nohria’s Theory assumes that a person needs to satisfy all Four Drives simultaneously
- Goal Setting Theory can be closely aligned to
the objectives of the business while the Four
Drive Theory concentrates more on the internal
motivating forces within each Employee
Motivation Strategies
- Performance-Related Pay
- Career Advancement
- Investment in Training
- Support
- Sanction
Motivation Strategy: Performance-Related Pay
Is where an Employee receives a financial reward based on them meeting or exceeding performance standards
Advantages of Performance-Related Pay (List 2)
- Can provide immediate motivation
- Rewards the best performers in the business
- Can improve productivity levels within the business
- Provides a direct financial reward to an Employee
- It is a Tangible way of recognising achievement
- Encourages goal-setting not to be too hard
Disadvantages of Performance-Related Pay (List 2)
- It is often a short-term motivator
- Generates a ‘competition-based’ culture
- Reduces equality in Employees’ pay
- Can cause resentment between Employees
- Can demotivate if goals are too challenging
- Difficult to measure productivity levels in some types of jobs
- A business may not be able to afford Performance-Related Pay
- Not all employees will be motivated by pay
Performance-Related Pay: Short-Term Motivation
More money may motivate Employees in the short-term to work harder and achieve goals
Performance-Related Pay: Long-Term Motivation
When financial rewards become an ongoing strategy, long-term motivation can occur
Motivation Strategy: Career Advancement
Is where an Employee is given the opportunity to take on greater responsibilities in the business
Forms of Career Advancement (List 2)
- Increased pay
- Promotions
- Fringe benefits
- Increased responsibilities
Advantages of Career Advancement (List 2)
- Helps the business retain talented Employees
- Satisfies the 3 higher needs of Malsow’s Hierarchy
- Employees are rewarded for their past performances
- Allows a way of keeping valuable and experienced Employees
- Will satisfy Employees who desire a sense of achievement or extra responsibility
Disadvantages of Career Advancement (List 2)
- It is difficult to promote all Employees
- May create Employee rivalries
- There is a lack of outside perspective brought into the business
- Employees may be promoted beyond their abilities
- Employees may have to compete for a limit number of promoting positions, creating and rivalry with the business creating low job satisfaction and motivation
- Promotion positions cannot just be established for the sake of promoting employees, which would contribute to higher costs. Positions must have a real purpose
Career Advancement: Short-Term Motivation
By providing the possibility of a promotion, motivation can increase in the short-term because it gives Employees something to strive towards
Career Advancement: Long-Term Motivation
Employees may see the position they would like to be in the long-term and set out a career pathway
Motivation Strategy: Investment in Training
Is when a business puts money or time into teaching new skills to Employees
Advantages of Investment in Training (List 2)
- It helps build a learning culture
- It helps retain valued Employees
- It enables the Employees to perform at a higher level
- Shows the Employee that the business values them
- Can give a sense of job security for Employees
- Improves the skills of the employees in both the short-term and long-term
- Improving employee skills can satisfy higher level needs in Maslow’s Hierarchy of Needs, as well as providing goals for Locke and Latham’s Goal Setting Theory and satisfying some of the four drives in Lawrence and Nohria’s Four Drive Theory
Disadvantages of Investment in Training (List 1)
- Training Employees is often expensive
- The business may train the Employee, but afterwards they may leave for another job that pays more
- Unless there are sufficient jobs within the business that require higher skill levels, the training may be wasted
Investment in Training: Short-Term Motivation
Employees are motivated in the short-term as they have improved skills and knowledge which allows them to perform their job better
Investment in Training: Long-Term Motivation
Ongoing Investment in Training creates a learning culture within the business which can lead to long-term motivation
Motivation Strategy: Support
Is when the business provides individual assistance and services to Employees to help them cope with problems that may negatively impact their lives or work performance
Advantages of Support (List 2)
- Support can be a long-term motivator
- Helps build a strong workplace culture where the business and Employees are supporting each other
- Support such as encouragement can be provided with little or no cost
- Can improve mental wellbeing of employees via Employee Assistance Programs if they are finding things difficult
- Support and encouragement can influence Employee attitudes which improves Employee motivation
Disadvantages of Support (List 2)
- Requires a positive workplace to work
- Employees may become too dependant on support services
- May be difficult to encourage and support some Employees
- Managers may not know of an employee’s problems or the particular employee who has the problem since support programs are confidential, which makes it difficult for managers and employees to demonstrate emotional intelligence
Support: Short-term Motivation
Support can be a short-term motivator by helping Employees complete tasks or helping them through difficult times
Support: Long-Term Motivation
Support can have a positive long-term impact on motivation by creating an environment where the Employee feels like they belong
Motivation Strategy: Sanction
Are the penalties that are imposed in an Employee for poor performance or for disobeying a policy. Sanctions may be necessary when the error is deliberate and reckless which may harm others
Examples of Sanctions (List 2)
- Loss of benefits
- Demotion
- Written warnings
Advantages of Sanctions (List 2)
- Sanctions for poor behaviour can motivate workers’ to improve their performance
- Sanctions can quickly stop bad behaviour
- Sanctions may bring other Employees in line with policies through the fear of being sanctioned
- Some Employees respond to sanctions and are motivated by the negative consequences of the sanction
- Positive reinforcement for Employees that always do the right thing because the sanctioning of Employees who do the wrong thing, it reassures other Employees they are doing the right thing
Disadvantages of Sanctions (List 2)
- Sanctions are normally a short-term motivator
- Can cause Employee resentment towards the Manager who gave them the Sanction
- Can cause Union involvement if the Employee believes they were unfairly Sanctioned
- Excessive emphasis on Sanctions can reduce the Employees’ sense of belonging, and therefore have a negative impact on motivation
Sanctions: Short-Term Motivation
Sanctions can ensure that Employees are motivated to do the right thing in the short-term through the fear of being Sanctioned
Sanctions: Long-Term Motivation
Over the long-term, Sanctions can harm relationships within the business and damage the Corporate Culture
Training and Development
Is when a business improves their Employees’ skills and abilities, which is a necessity for both personal and business growth
Methods of Training and Development
- On-the-Job Training
- Off-the-Job Training
Benefits of Training and Development for Employees (List 2)
- Improves the Employee’s abilities
- Improves the Employee’s self-esteem
- Allows Employees’ to take on greater responsibility
- Increased job satisfaction through better job performance
- Opportunity for promotion/s and self-improvement
- Provides the Employee a greater ability to adapt and cope with changes
On-the-Job Training
Is where an Employee is trained at their workplace, often whilst they are performing their job or in a special setting, such as a training room. The training is often conducted by an experienced Employee or Manager. On some occasions, external trainers are used
Advantages of On-the-Job Training (List 2)
- It is normally the most cost effective form of training
- Employee’s often work whilst being trained, so they are still productive
- Employees are in a familiar environment, so they feel more comfortable
- Employees often gain experience with the equipment they will be working with
- Trainees use the actual equipment that’s required to do the job
- Immediate feedback from more experienced colleagues is available
Disadvantages of On-the-Job Training (List 2)
- The quality of the Trainer may vary
- The business operations may be disrupted
- The learning environment may be loud
- Bad habits from older Employees may pass on
- If experienced Employee is the Trainer, they have to put their regular duties on hold to train the Employee
- If real tools and equipment are used, other Employees may be distracted and therefore production is disrupted
Off-the-Job Training
Is where the Employee is trained away from the workplace. This usually involves sending Employees to University or TAFE, so they get an official qualification
Advantages of Off-the-Job Training (List 2)
- Less interruptions from the workplace
- Employees learn from experienced specialists
- Gain a formal qualification after the training is complete
- Availability of a wider range of skills and qualifications than those is the workplace
- Usually more structured and organised, with clear assessment processes
- Training can be more intense due to no workplace distractions for both the Trainer and Trainee
Disadvantages of Off-the-Job Training (List 2)
- Often the most expensive form of training
- Lost working time due to being away from the workplace
- Employees may used gained qualification to leave the business to find a higher paying job
- Employee may not learn on exact equipment that will be used in the workplace
- The training may not relate directly to the exact skills required in the workplace
Performance Management
Is the process that is used to evaluate and improve individual and business performance
Performance Management Strategies
- Management by Objectives (MBO)
- Performance Appraisal
- Self-Evaluation
- Employee Observation
Performance Management Strategy: Management by Objectives (MBO)
Is a program where both the Manager and Employee set clear objectives together which are in line with the business. The Employee is then evaluated against the set objectives and provided feedback on their performance
Performance Management Strategy: Performance Appraisal
Is an evaluation that measures an Employee’s performance, provides feedback and develops new objectives
Methods of Performance Appraisal
- Essay Method
- Rating Scale
- Critical Incident Method
Methods of Performance Appraisal: Essay Method
Is where the Manager writes down notes on the Employee and a long extended response on the Employee’s performance
Methods of Performance Appraisal: Rating Scale
Is numerical data that looks at rating the Employee on different criteria, usually ranging on a scale from 1-10
Methods of Performance Appraisal: Critical Incident Method
Is where the Manager writes down any serious incidents that has occurred and how the Employee responded during those incidents. The Employee’s performance is then discussed
Performance Management Strategy: Self Evaluation
Is where an Employee assesses their own performance related to predetermined objectives. The Employee’s performance and feedback is discussed with the Manager
Performance Management Strategy: Employee Observation
Is where an Employee’s performance is regularly watched and evaluated. The common form of observation is 360° feedback where the Manager talks to the Stakeholders that are associated with the Employee, such as their peers and Customers
Termination
Is where an Employee leaves a workplace, ending the employment relationship. Termination can either be Voluntary or Involuntary
Voluntary Termination
Is where the Employee volunteers to leave the business, whilst the business is terminating Employees
Involuntary Termination
Is where the Employee is forced to leave the business
Types of Termination
- Retirement
- Resignation
- Redundancy
- Dismissal
Type of Termination: Retirement
Is a type of Voluntary Termination where the Employee decides to leave the workforce permanently on their own merits
Reasons Why Employees May Retire (List 2)
- Old age
- Illness
- Injury
Entitlements for Retirees
Retiring Employees are entitled to Annual Leave, Long Service leave and advice or counselling (if needed)
Transition Issues for Retirees
The business slowly reduces the Employee’s working hours, which allows the Employee to gradually transition into Retirement
Type of Termination: Resignation
Is a type of Voluntary Termination where the Employee voluntarily leaves the business
Reasons Why Employees May Resign (List 2)
- The Employee can receive better pay elsewhere
- They want to change their career path
- The Employee gets a promotion at another business
Entitlements for Resigning Employees
- Payment for completed work
- The business is entitled to notice regarding the Employee’s resignation
Transition Issues for Resigning Employees
The business will provide advice and support the Employee leaving the business
Type of Termination: Redundancy
Is where an Employee leaves the business because their job no longer exists. Redundancy can be Voluntary or Involuntary
Voluntary Redundancy
Is where the Employee nominates themselves to leave the business if there is insufficient work
Involuntary Redundancy
Is where the Employee is forced to leave the business due to there being insufficient work
Entitlements for Redundant Employees
Redundant Employees are entitled to Redundancy Packages, notice to leave and time off to attend job interviews
Transition Issues for Redundant Employees
The business will provide the Redundant Employee with Counselling, Training and Career Advice
Dismissal
Is Involuntary Termination where the Employee is terminated from the business due to unacceptable behaviour or performance
Types of Dismissal
- On-Notice Dismissal
- Summary Dismissal
- Unfair Dismissal
Type of Dismissal: On-Notice Dismissal
Is when an Employee is not performing satisfactorily and they are given notice and an opportunity to improve their performance
Type of Dismissal: Summary Dismissal
Is when an Employee commits a serious breach of their Employment Contract and can be dismissed immediately, without notice.
Reasons for Summary Dismissal (List 2)
- Theft
- Serious breach of safety
- Sexual harassment
Type of Dismissal: Unfair Dismissal
A type of Dismissal that can occur if the Employee believes they were dismissed in an unjust, harsh or illegal manner such as the Employee being absent from work due to an illness or injury, belonging or not belonging to a trade union or discrimination on the basis on race, sex, religion, etc. The Fair Work Commission will decide if the employee was dismissed unfairly
Entitlements for Dismissed Employees
Dismissed Employees are entitled to their pay for the work they have done
Transition Issues for Dismissed Employees
Some businesses may offer Career Transition Services to their dismissed Employees
Workplace Relations
Is the relationship and communication between Employees and their Employers in areas such as Wages and Working Conditions
Key Participants in Workplace Relations
- Employees
- Human Resource Manager
- Unions
- Employer Associations
- Fair Work Commission (FWC)
Key Participant in Workplace Relations: Employees
Are those who work in the business and have the role to work towards achieving Business Objectives
Roles of Employees in Workplace Relations (List 2)
- To participate in Dispute Resolution
- The negotiation of new agreements
- Voting on new agreements
- Taking industrial action if required
- They need to carry out their responsibilities
Key Participant in Workplace Relations: Human Resource Manager
Is responsible for managing the relationship between the Employees and the business
Roles of Human Resource Management in Workplace Relations (List 2)
- Represent the Employer in negotiations of New Wage Agreements
- Participate in resolution of disputes
- Implement agreements such as training Managers and Supervisors
- Cooperate with Employer Associations, Unions and the Fair Work Commission
Key Participant in Workplace Relations: Unions
Are organisations that represent and advise Employees
Roles of Unions in Workplace Relations (List 2)
- Offer advice to Employees
- Support and represent Employees in disputes
- Represent Employees in New Wage Agreements
- Organise strikes and other industrial actions
Key Participant in Workplace Relations: Employer Associations
Are organisations that represent and advise Employers
Roles of Employer Associations Workplace Relations (List 2)
- To Negotiate New Wage Agreements
- Advising or representing Employers in disputes
- Notifying and advising Employers with law changes
Key Participant in Workplace Relations: Fair Work Commission (FWC)
Is Australia’s independent Workplace Relations Tribunal
Roles of the Fair Work Commission in Workplace Relations (List 2)
- To hear Unfair Dismissal cases
- To approve Workplace Agreements
- To hear and investigate bullying and harassment claims
- Providing a safety net of minimum wages and conditions for all Employees
- Regulating and monitoring industrial action
- Assisting in resolving workplace disputes through Mediation, Conciliation or Arbitration
Types of Employment Contracts
- Awards
- Enterprise Agreements
Type of Employment Contract: Awards
Is a legally binding employment contract made by the Fair Work Commission that states the minimum pay and working conditions for a given industry. This is updated every 4 years
Advantages of Awards (List 2)
- Ensures wage equality across an industry
- Less expensive for businesses
- Ensures stability and predictability in the negotiation process
- Ensures that one Employee is not worse off than another
- It may be easier for an Employer to establish a friendly relationship with Unions who represent Employees
- Employers and Employees may prefer an Award that can be settled with an independent “third-party” that will be faster to be decided
Disadvantages of Awards (List 2)
- Can’t control the pay given to Employees’
- There is no incentive for Employer-Employee relations
- Employees cannot negotiate pay
- Less flexible to cater for requirements of individual workplaces and Employees needs
- Employees will not be better off than others due to equality
Type of Employment Contract: Enterprise Agreements
A contract between an Employer and a group of Employees, relating to wages and working conditions. This is reviewed every 4 years and has to be approved by the Fair Work Commission
Advantages of Enterprise Agreements (List 2)
- Employees can negotiate pay
- Employers can offer pay and working conditions above an Award if Employees increase their productivity
- The business must meet the BOOT test so that Employees are better off when the conditions in an Agreement are compared to a relevant Award
Disadvantages of Enterprise Agreements (List 2)
- Less wage equality across an industry
- It is more expensive for the business
- Negotiation of wages and working conditions is time-consuming
- Can cause conflict between the Employer and Employee due to ongoing negotiation about wages and working conditions in the Enterprise Agreement
- Less collective Employee strength in bargaining
Similarities Between Awards and Enterprise Agreements (List 2)
- Both reviewed every 4 years
- Both have to be approved by the Fair Work Commission (FWC)
- Both have to contain pay and working conditions equal to or better than the 10 National Employment Standards (NES)
Differences Between Awards and Enterprise Agreements (List 2)
- Enterprise Agreements contain better pay and working conditions than Awards
- Awards apply to an entire industry whilst Enterprise Agreements only apply to one workplace
- Awards are determined by the Fair Work Commission (FWC) whilst Enterprise Agreements are negotiated between and Employer and Employee
Methods for Dispute Resolution
- Grievance Procedure
- Mediation
- Arbitration
Method for Dispute Resolution: Grievance Procedure
Is where the Human Resource Manager and an Employee resolve matters through a formal set of steps. In some cases, Unions are involved. If this doesn’t solve the problem, Mediation has to occur
Method for Dispute Resolution: Mediation
Mediation occurs when a Grievance Procedure has not been successful. It is where an independent third-party ensures that the conversation between the parties runs smoothly. The Mediator does not offer suggestions to the parties on how to resolve their dispute. If this does not solve the problem, Arbitration has to occur
Method for Dispute Resolution: Arbitration
Arbitration occurs when Mediation has not been successful. It is where both parties put their case forward to an independent third-party who makes the decision for the parties, which is legally binding
Similarities between Mediation and Arbitration (List 2)
- Both Mediation and Arbitration are Dispute Resolution Methods for Awards and Enterprise Agreements
- Both usually involve the Fair Work Commission (FWC)
- Both mean that the Employers and Employees were unable to resolve the dispute internally
Differences Between Mediation and Arbitration (List 2)
- Mediation is informal whilst Arbitration is formal
- Mediators do not make any decisions whilst Arbitrators do
- Outcomes from Mediation are not legally binding whilst outcome from Arbitration are
- Mediation is voluntary whilst parties can be forced into Arbitration
